GeoMet Announces 2007 Proved Reserves, Preliminary 2007 Gas Sales Volumes and Estimates of 2008 Gas Sales Volumes and 2008 Capital Spending
Houston, Texas – January 30, 2008 - GeoMet, Inc. (NASDAQ: GMET) today announced 2007 year-end proved reserves; preliminary 2007 net gas sales volumes; estimated 2008 net gas sales volumes; and capital spending plans for 2008.
2007 Year-end Proved Reserves
The Company’s proved reserves as of December 31, 2007, as estimated by DeGolyer and MacNaughton, an independent reservoir engineering firm, were approximately 350.2 Bcf, an increase of approximately 8% from year-end 2006 proved reserves of 325.7 Bcf. The 2007 proved reserves were 100% coalbed methane and 76% developed. The PV-10 of proved year-end reserves was $662.8 million using SEC pricing of $7.46 per MMBtu at December 31, 2007 as compared to a PV-10 of $525.6 million at year-end 2006 using SEC pricing of $5.63 per MMBtu. Approximately 61% of year-end 2007 proved reserves are in the Gurnee field in Alabama and 38% in the Pond Creek and Lasher fields in West Virginia and Virginia.
The year over year change in GeoMet’s proved reserves was equal to approximately 444% of estimated 2007 net sales volumes.
2007 Gas Sales Volumes and Estimates for 2008 Gas Sales Volume Growth
Preliminary estimated average daily net gas sales volumes for 2007 were 19.5 MMcf, an increase of approximately 14.4% over 2006. Preliminary estimated December 2007 average daily net gas sales volumes were approximately 20.5 MMcf. Average daily net sales volumes in the fourth quarter of 2007 increased approximately 3% as compared to the third quarter of 2007.
We estimate an increase in average daily net sales volumes in 2008 of 13% to 17% as compared to the 2007 period.
2008 Capital Expenditure Budget
GeoMet’s capital expenditure budget for 2008 totals approximately $48.8 million as compared to an estimated $54.4 million expended in 2007. The current year budget includes approximately $34.3 million for development, $4.7 million for exploration and evaluation, $1.5 million for leasehold and $5.3 million for other capitalized costs. In addition, the budget includes a $3 million contingent payment related to the 2004 acquisition of a 50% interest in the Pond Creek field in West Virginia. The contingent payment is based on actual gas prices received for the four-year period ended December 31, 2007 as compared to a stated price.
Approximately $21.6 million of the 2008 capital budget is allocated to the Pond Creek and Lasher fields in Virginia and West Virginia; $9.7 million is allocated to the Gurnee field and the Garden City Chattanooga shale prospect in Alabama; and $9.1 million is allocated to the Peace River field in British Columbia. The Company will retain maximum flexibility in its capital budget for 2008 in order to react to results at various projects and other events and reallocate or adjust capital spending as circumstances dictate.
As of December 31, 2007, GeoMet had $84 million of unused credit committed under its bank credit agreement. This financing commitment, together with internally generated cash flow, is expected to be more than sufficient to fund the 2008 capital budget.
About GeoMet, Inc.
GeoMet, Inc. is an independent energy company primarily engaged in the exploration for and development and production of natural gas from coal seams. Our principal operations and producing properties are located in the Cahaba Basin in Alabama and the Central Appalachian Basin in West Virginia and Virginia. We also control additional coalbed methane and oil and gas development rights, principally in Alabama, British Columbia, Virginia, and West Virginia.
For more information please contact Stephen M. Smith at (713) 287-2251 or firstname.lastname@example.org or visit our website at www.geometinc.com.
Forward Looking Statements Notice
This press release may contain “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended. These forward-looking statements are subject to certain risks, trends and uncertainties that could cause actual results to differ materially from those projected. Among those risks, trends and uncertainties are our estimate of the sufficiency of our existing capital sources, our ability to raise additional capital to fund cash requirements for future operations, the uncertainties involved in estimating quantities of proved natural gas reserves, in prospect development and property acquisitions and in projecting future rates of production, our ability to transport gas to market, the timing of development expenditures and drilling of wells, and the operating hazards attendant to the coalbed methane gas business. In particular, careful consideration should be given to cautionary statements made in the various reports the Company has filed with the Securities and Exchange Commission. GeoMet undertakes no duty to update or revise these forward looking statements.